Can Subscription-Based Models Revitalize the Mid-Tier Game Industry?

The decline of the AA game tier has been a topic of discussion for over a decade, with the Xbox 360 era marking both the peak and the beginning of the end for lower-budget, quickly developed, and rapidly discounted AA titles. The gap left by their demise has been brought into sharp focus by recent events, including the move to $70 price points for AAA games, which has made consumers more aware of the fact that many self-styled AAA games are actually just AA-tier games in disguise. The notion of an 'AAAA' game has also been floated by some executives, in an attempt to differentiate titles within the increasingly crowded and broadly defined 'AAA' category. At the heart of the problem is the polarization of the industry's output, with AAA games priced at $60 or $70 at one end, and indie games priced below $20 at the other. There is precious little in between, with few games launching at mid-range prices, and most projects from major publishers and studios being bracketed in the AAA category. Many developers are not happy with the pressure to label everything they work on as AAA and launch it at a $70 price point, and there is a strong interest in exploring other price points, including stricter budget controls on projects. However, there are concerns that doing so is risky, not just for the game, but for the future of the studio and its staff, who fear being unfairly pigeonholed for working on 'sub-AAA' games. The situation is unsustainable, and the desire for a studio to be seen as a high-end AAA developer is understandable, but the lack of a path to market at a sensible price point for mid-range games is a major issue. The case of Ascendant Studios, who recently furloughed staff due to the poor performance of their game Immortals of Aveum, highlights the problem. The game, which launched at $70, struggled to find its audience, and the studio's founder, Bret Robbins, has suggested that it could have performed better if it had launched at a lower price point. This is a view echoed by Saber Interactive CEO Matthew Karch, who has expressed concerns about the $70 price point creating unrealistic consumer expectations. There are some bright spots, such as the success of Helldivers 2, which launched at $40 and became a surprise hit, but generally, the industry lacks a good space for solid, interesting games that lack the massive resources and polish of true AAA games. Building a mid-range tier would take time and commitment, but it could change the economics of game development, by cultivating a market for titles with lower price points and consumer expectations set realistically for shorter development times and less extensive content. One potential solution is the rise of subscription services, which need a steady flow of content to keep subscribers engaged. Services like Game Pass could resuscitate the AA game segment by providing a platform for lower-budget, but nonetheless fun and entertaining games, which could be developed with a focus on experimentation and niche appeal. Controlling budgets and designing games to fit within the constraints of limited budgets and timescales would become key skills for studio managers, and returning the mid-tier sector to prominence could rescue a whole tier of creative output and provide stability to the development sector overall.